AR Turnover Calculator

Accounts receivable turnover shows how many times a year a business collects its average receivables. Higher turnover means faster collection.

How to use the AR Turnover Calculator

  1. Enter annual net credit sales.
  2. Enter beginning and ending AR.
  3. Read turnover and collection period.

How it works

Turnover = Net credit sales ÷ Average AR, where Average AR = (Beginning AR + Ending AR) ÷ 2. Average collection period = 365 ÷ Turnover.

Worked example

Sales 12,000,000 and average AR 1,200,000: turnover 10×, a 36.5-day collection period.

Good to know

Compare to prior periods and to industry peers.

Very high turnover can mean overly strict credit terms.

Use net credit sales, not total sales.

Frequently asked questions

Divide net credit sales by average accounts receivable.

Usually, but extremely high values may signal credit policy that costs sales.

DSO ≈ 365 ÷ turnover.

Results are estimates for information only and are not accounting, financial or legal advice.